Ireland’s attempts to recover from the collapse of the Celtic Tiger have been handed a ringing endorsement by the International Monetary Fund – along with a check for a whopping $5.5billion.

The IMF has approved the next payment of funds to the Irish government under the $110 billion bail-out package agreed with the European Union.

The pay-out was approved after the IMF’s executive board undertook a fourth review of Ireland’s current economic performance and the government’s handling of the bail-out terms.

The IMF will provide $30 billion in rescue funding over the next three years and has already funded $17billion.

The announcement of the latest funding came after a row broke out between opposition party Fianna Fail and the government over comments made on the current state of the Euro by Finance Minister Michael Noonan.

Noonan had warned that a referendum on tougher rules for euro zone countries would inevitably turn into a vote on whether Ireland should remain in the euro.

The Fine Gael Minister told the Irish Times that he would prefer if a referendum were ‘not necessary’ as it would be seen by the world as a vote on ‘whether the Irish want to stay part of the single currency’.

Noonan claimed Ireland did not have a problem with the new governance regulations for the euro zone and a fiscal control Bill.

He said: “So my personal wish is that it can be done without constitutional change. But if constitutional change is required then we will have a referendum and we will put the case to the people and it will come down to whether one wants to continue in the euro, or not.

“Because in the nature of referendums, the issue itself might be complex, about new governance rules for the euro, [but] in the practical politics it will be dealt with in shorthand and the shorthand will be, ‘Do you want to maintain Ireland’s position as a euro zone country’.

“I am not even convinced yet that there will have to be a referendum. We haven’t seen drafts yet. But what I am saying is that, in practical politics, if there is a referendum the wider issue of Ireland’s future in the euro zone will become an issue, even though the actual question that will be put to the people will be about the governance rules for the euro.”

McGrath said: “Michael Noonan’s extraordinary intervention on the question of whether or not there should be a referendum on the new proposed intergovernmental agreement is an insult to Irish people’s intelligence.

“The fact that the Minister’s language mirrors almost exactly the proposition used by France and Germany to scupper recent plans for a referendum in Greece will not be lost on people.”